ATF

Sample Block


Bureau of Alcohol, Tobacco, Firearms and Explosives

Southern District of Indiana

www.justice.gov/usao/ins

For Immediate Release

Tuesday, April 12, 2011

Joseph H. Hogsett, United States Attorney

Contact: Mary Bippus
(317) 229-2403
mary.bippus@usdoj.gov

Gun Shop Owner Arrested, Thousands of Firearms Seized Following Federal Investigation

INDIANAPOLIS – Joseph H. Hogsett, United States Attorney, announced today that Charles F. Ludington, 61, Parker City, Ind., was charged with violating numerous federal firearms laws following a thorough three month investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).

According to the allegations in the criminal complaint, Charles F. Fred Ludington (Ludington) is the sole owner of Ludco Gun Shop, a federally licensed firearms dealer located in Parker City. Between August and November of 2010, Ludington’s firearms dealership underwent a routine, periodic audit conducted by agents of the ATF. During the course of that audit, ATF Inspectors discovered that Ludington had acquired but could not account for 997 firearms that were recorded in his inventory. Ninety-three (93) firearms were located in the physical inventory that had not been logged into the A & D record. In twenty-five (25) instances, a firearm was found in physical inventory but the A & D books reflected the firearm has been sold. Additionally, inspectors uncovered documents suggesting that, on at least seven (7) occasions, Ludco sold firearms to persons who were prohibited by federal law from possessing them. Ludington was also cited with selling a handgun to an out of state resident in violation of federal law, and numerous other regulatory and record keeping violations. At the conclusion of the audit, the inspectors issued Ludington a warning not to engage in such unlawful conduct in the future.

As a result of this audit, an investigation was initiated in January of 2011. On five (5) separate occasions between January and March 2011, undercover Indiana State Police detectives, ATF agents, and a confidential informant went to Ludco posing as customers. On each of those occasions, Ludington sold firearms despite the fact that someone other than the actual purchaser of the firearms was filling out the mandatory paperwork. This practice is commonly referred to as a straw purchase. In three (3) of those instances, an informant (who is also a convicted felon) informed Ludington that he wanted to purchase a firearm. Ludington knew the purchaser was a convicted felon, yet sold the firearm anyway. Ludington assisted an undercover ATF agent, acting as a straw purchaser, in filling out the required paperwork for the firearms the convicted felon wanted to buy. Ludington allowed the felon to purchase two 9mm pistols, two 7.62x39mm assault rifles, a 9mm assault rifle, and a .45 caliber revolver capable of firing a 410 shotgun shell. While the undercover ATF agent was filling out the required paperwork, Ludington asked the convicted felon whether he needed any ammunition. The convicted felon handed Ludington the money to complete the purchase of the firearms.

According to Assistant U.S. Attorney Matthew J. Rinka, who is prosecuting the case for the government, ATF and ISP also executed search warrants today at Ludco Gun Shop, Ludington’s residence, and at a storage facility owned by Ludington, seizing the more than 3,000 firearms in Ludington’s inventory and as well as records related to Ludco’s business operation. The government is seeking forfeiture of all the firearms on grounds that Ludington’s business is permeated with an active scheme to defraud federal regulators and violate federal law, and that proceeds of unlawful firearms sales were used to maintain Ludco's extensive inventory of firearms.

If convicted of the charges, Ludington faces a maximum of 10 years in prison and a $250,000 fine. An initial hearing will be scheduled for a later date in Indianapolis before a U.S. Magistrate Judge.

A criminal complaint is only an allegation and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.

###